Main Street Finance

Trends in Fortune 500 Companies Going Global

By Kat

Being classified as a Fortune 500 company is an incredibly prestigious honor. They have been deemed top of their class in terms of revenues, profits, return to investors, earnings per share, and several other factors.

All of these companies share two things in common. They publicly file financial statements with a government agency and are home grown, incorporated and operating in America. Many of the companies featured on the annual list were started in a garage or a college dorm and have since skyrocketed to lead the U.S. business industry as we know it.

At the same time, once a company earns some confidence and credibility within their field, why limit the success to solely one country? All around the globe there are competitive opportunities for corporations to expand and thrive, building on the grassroots that were planted in their home country.

But just exactly how many companies take the leap overseas? With an endless list of possibilities, where do they decide to settle in hopes of further expanding their profits? Which industries are most likely to branch out internationally? A recent study answered all these questions about international expansion and it may have business owners questioning why they’re confining themselves to just the U.S.

Majority of Fortune 500 Companies Go Global

About two-thirds of companies among the list of highest performing American businesses have at least one international location. Three percent of these companies are extremely acquainted with the global process with over one thousand international locations.

At the top of this list is famous fast-food chain McDonald’s with over 23,000 establishments outside of the US. While a McDonald’s in Japan or even Canada may not look completely identical to American McDonald’s, this company has clearly indicated strength in adaptability.

Where in the World Are the Fortune 500s?

The most common place to branch out is a short journey North to our neighbors in Canada. This makes sense as Canadian culture is very similar to our own, making adjustment a little less daunting. Plus, risk factor is low given that if all fails the home country is only a few blocks away.

The UK comes in second for international locations, lead by one of the world’s most iconic cities, London. While they have a much further travel, business owners don’t need to worry about a language barrier interrupting their expansions.

One Industry is Far More Likely to Branch Out

There is a lot of variation on the degree of international expansion dependent on industry. Some fields are simply much more versatile while others can comfortably operate without ever leaving one’s desk.

Unsurprisingly, the industry with the most international presence is hotels, restaurants and leisure. Due to the very nature of tourism, there is a need for these companies to expand outside American borders.

Other industries such as telecommunications and aerospace and defense are the least likely to go global. While much of their work lies internally, they also have the power to go just about anywhere from the comfort of their computer screens.

The process of leaving one’s own country that they know and love can sound extremely terrifying. However, it can also reap extreme successes. Maybe that explains why about half of all Fortune 500 companies have moved from beyond their original headquarters location. At the end of the day, wherever a business travels, they will always have a home in America.

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